Documents & Reports

Foreign bank entry : experience implications for developing economies, and agenda for further research (English)

Abstract

In recent years foreign banks have expanded their presence significantly in several developing economies. In Argentina and Chile in Latin America and in the Czech Republic, Hungary and Poland in Eastern Europe, foreign controlled banks now hold more than... See More +In recent years foreign banks have expanded their presence significantly in several developing economies. In Argentina and Chile in Latin America and in the Czech Republic, Hungary and Poland in Eastern Europe, foreign controlled banks now hold more than half of total banking assets. In other regions trend is similar, through foreign banker entry has been slower. Despite the growing number of countries embracing foreign bank entry, important questions are still debated: what draws foreign banks to a country? Which banks expands abroad? What do foreign banks do once they arrive? How do foreign banks mode of entry and organizational form affect their behavior? This article summarizes current knowledge on these issues. Because the existing literature focuses heavily on developed economies, it also puts forth an agenda for further study of the causes and effects of foreign banks entry in developing economies.
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